A smart guide to semi-free choice: the full transfer process, 6 to 8 weeks

This article is a rewrite of a report from September 2012.

Semi-free choice took effect on November 1. Strategies abounded, but many people barely understood the arrangement itself. First tools, then craft — master the limits on switching trustees, the different account types and the transfer process before deciding.

Why “semi”? Two concepts to separate

1. Contribution account vs preserved account. The employee contribution account holds the monthly payments; the once-a-year switching limit applies to it. Preserved accounts are outside semi-free choice — they can move anytime, with no limit on frequency.

2. Current-job contributions vs past-job contributions. Past-job contributions inside a contribution account (i.e. consolidated preserved balances) are not bound by the once-a-year limit and can switch any number of times. Note the old trap: before semi-free choice, moving preserved money into the contribution account locked it from switching — the new arrangement removed that shackle.

What were the hard rules?

All-or-nothing transfer. Once decided, the entire employee-contribution accrued benefits in the contribution account had to move — no half-and-half. So long-tenure workers switching for the first time needed extra care: that was a substantial sum.

Also: switching didn’t mean contributing monthly to the new trustee — it meant moving the accumulated balance once per calendar year.

How did the 6-to-8-week process work?